Finding 380606 (2022-001)

Criteria Title 45 U.S. Code of Federal Regulations Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, section 75.303(a) states the nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Furthermore, Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200.308), Revision of budget and program plans, specifies that recipients of Federal awards must request prior approvals from Federal awarding agencies for 1) Change in a key person specified in the application or the Federal award, and 2) The disengagement from the project for more than three months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator. Condition Bassett Healthcare Network (the Network) failed to properly request approval for the disengagement of a key person specified in the Federal award application. Cause The condition found is due to lack of timeliness in communication regarding the disengagement of key personnel to the Network who are is responsible for requesting Federal awarding agency approval as well as not retaining key documentation. Possible Asserted Effect Failure to identify changes in or disengagement of key personnel and, therefore, failure to request approval from the appropriate Federal awarding agency. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding This is not a repeat finding. Recommendation We recommend the Network enhance the precision level and effectiveness of its internal controls related to the identification of changes to key personnel to ensure proper approval is requested timely. Further, we recommend the implementation of retention Views of Responsible Officials Recommendation accepted. Corrective action in progress. Reference the corrective action plan for further details.